Atlantic Sapphire Asa · OSL:ASA
Atlantic Sapphire Asa — Investor Day (May 2019)
78 slides from Atlantic Sapphire Asa's investor day presentation, May 10, 2019
Slide 1: Investor Day - Miami: Accelerating US Growth
Investor Day - Miami May 10th, 2019 Accelerating US Growth |
Slide 2: Important Information
IMPORTANT INFORMATION This presentation (the "Presentation") has been produced by Atlantic Sapphire AS (the "Company") exclusively for information purposes. This Presentation has not been approved, reviewed or registered with any public authority or stock exchange. This Presentation is not a prospec
Slide 3: Accelerating US Build-out
1. Accelerating US Build-out Performance to date in DK operations and US construction management are driving business plan acceleration Annual harvest volumes (kt HOG) 220 New plan 2 Former plan New plan yields 200 ~65kt in cumulative harvest by 2026 165 140 3 1 Long term annual 120 Immediate harves
Slide 4: US Photos
3. US Photos August 2018 April 2019 Roofing extended Grow out tank Start feeding tanks Post-smolt tanks Construction in progress 1.6 Million Fish, Up To Parr, Under The Roof To Date. Project Completion Remains On Schedule 4|
Slide 5: Strategy Development
4. Strategy Development Technology innovation and existing infrastructure expected to enable accelerated production phasing Incremental capacity added: former vs new plan (kt HOG) ▪ The new plan allows for continuous build-out in smaller New capacity phasing phases expected to reduce construction co
Slide 6: Revised US Production Plan
5. Revised US Production Plan Cumulative harvest volumes (kt HOG) Cumulative Volume addition harvest New plan expected to increase cumulative harvest vs former plan 350 volumes in the amount of ~45kt (~53%) by 2024 65% ~ 59% 60% 300 ~ 53% 55% 50% 250 ~ 41% 45% ~ 36% 40% 200 35% 30% 150 25% ~ 16% 20%
Slide 7: Vertical Integration Opportunities
6. Vertical Integration Opportunities Packaging Broodstock material Sustainable Secondary power processing BluehouseTM vertical integration opportunities Feed Fertilizer Value-added Oxygen ingredients ▪ Identified opportunities expected to increase efficiency and new revenue streams, while maintaini
Slide 8: Use of Proceeds
7. Use of Proceeds Initiatives Description Use of proceeds ▪ 2019 - begin phase 2a design and pre-construction planning Advance US 2a build- ▪ 2020 - equity to construct 6 independent grow out systems out (+10kt HOG in 2021) USD 42 million ▪ 2021 - increase US projected biomass gain (rlw) from 12kt
Slide 9: Phase 2a Financing
8. Phase 2a Financing Phase 2a (10kt) capex financing sources (USDm) ~115 ~73 ~42 Contemplated equity and new Phase 2a + land equity from Additional net debt and Phase 2a capex debt is projected to construct 6 private placement1 operating cash flow and working capital additional, independent grow ou
Slide 10: Land Expansion Opportunities
9. Land Expansion Opportunities ▪ Atlantic Sapphire is targeting to acquire up to an additional 300-500 acres of land in South West Miami-Dade County that meets BluehouseTM requirements ▪ The addressable area is ~35,000 acres, zoned Atlantic Sapphire USA for agriculture, and consists primarily of nu
Slide 11: Company Overview
ATLANTIC GQ SAPPHIR Company Overview
Slide 12: Management
2. Management Selected board Executive management members Johan E. Andreassen Jose Prado CEO & Co-Founder CFO & EVP ▪ Headed a 30,000 tonnes capacity salmon farming company, Villa Organic, ▪ 21 years full investment cycle experience, from early stage to mid-cap from idea inception to IPO and strateg
Slide 13: Opportunity
3. Opportunity … and is experiencing high sea lice and disease management Sea farming requires 2-20 ̊C sea temperature and sheltered areas… issues Area not eligible for conventional net pen salmon farming ▪ Close to 100% of the global supply of Atlantic salmon is produced in sea ▪ The conventional i
Slide 14: US Market Potential
5. US Market Potential Estimated US market size, Atlantic salmon (kt)1 US market projection, 2027 (kt)1 ~900 ~900 +7% Large addressable market at play for Sapphire and other land-raised producers 120 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Supply from Total US market conventional sea farmi
Slide 15: Global Salmon Trade Patterns
6. Global Salmon Trade Patterns1 Norway, Faroe kt Islands, Iceland Harvest 1,403 Market 54 Russia kt Harvest 34 Market 130 North America kt EU kt Harvest 190 Harvest 240 Market 595 Asia kt Market 1,142 Harvest 30 Market 615 5-8 days LatAm kt Harvest 930 Market 160 Oceania kt Harvest 83 Market 75 = H
Slide 16: Unique Value Proposition
7. Unique Value Proposition Typical conventional sea based salmon farming value chain Land-based Well boat Sea based Well boat End Processing Trucking Airfreight Trucking hatchery transport net pens transport consumer Atlantic Sapphire Miami operation value chain BluehouseTM Trucking End consumer At
Slide 17: Conventional Industry Environmental Issues
8. Conventional Industry Environmental Issues Diseases and parasites Escapes Untreated fish waste Conventional ocean net pen farming experiences a series of Impact on wild concerns salmon Medicines and pesticides Predators Micro plastics Conventional Ocean Net Pen Farming Industry Issues Are Signifi
Slide 18: ESG Leadership
9. ESG Leadership Salmon Farming Is Regarded As An ESG Leader In Protein Production1 FAIRR Index – Benchmarking intensive livestock and fish farming companies on ESG issues Salmon farmers Atlantic Sapphire Is Well Positioned To Be Top Ranked on ESG Parameters, Globally. Source: Coller FAIRR Protein
Slide 19: Location Rationale – Miami, Florida
10. Location Rationale – Miami, Florida Atlantic Ocean 1 Discharge water – Unique geology to 5¢ 10¢ sustainably discharge salt water in quantities required to scale 14¢ 2 Intake water – Highly productive aquifers Atlantic Ocean with stable, high quality salt and fresh 11¢ groundwater 7¢ 3 Electricit
Slide 20: Bluehouse Infrastructure
11. BluehouseTM Infrastructure 1 Egg hatchery 2 Juvenile tanks 4 3 Smolt tanks 4 4 Grow out tanks 6 3 5 Biofilters 5 2 1 6 Processing 7 5 7 Truck pick-up Treated, non-toxic waste water Fresh and saline discharged intake water From Egg To Plate – BluehouseTM Fully Controls Key Drivers Of Production C
Slide 21: US Water Infrastructure
12. US Water Infrastructure Unique Florida groundwater aquifer production and discharge geology ✓ Critical production wells are already Biscayne Aquifer- fresh water supply completed and tested water quality successfully 1 ✓ Onsite access to underground aquifers for fresh and saline water supply Flo
Slide 22: Summary
13. Summary Why Atlantic Sapphire Management Team ▪ Industry-leading, experienced team. Equity-linked performance culture ▪ Technology proof of concept achieved in Denmark, including considerable learning Denmark Experience from continued process improvements, as well as mistakes ▪ Commercial scale
Slide 23: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR
Slide 24: Human Capital Update
Human Capital Update Cristina Espejo - Director of Human Capital |
Slide 25: Core Values & Massive Transformative Purpose
Core Values & Massive Transformative Purpose Core Values Massive Transformative Purpose Passion – Purpose. Dedication. Drive. Performance – Initiative. Collaboration. Results. TM Pioneering Bluehouse Farming, Locally; Innovation – Continuous improvement. Insights. Learning. Transforming Protein Prod
Slide 26: HR Function Roadmap
HR Function Roadmap PERFORMANCE CULTURE TALENT STRUCTURE MTP & Workforce Onboarding Compensation Technology Core Values Planning Platform Process Diversity Other Development Core Integration Industries Processes Safety Recruiting Localization Sapphire Administration & Academy Compliance 26 |
Slide 27: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR
Slide 28: Denmark Update
Denmark Update Ole Christian Norvik – MD, Denmark |
Slide 29: Denmark – April 2019
Denmark – April 2019 29 |
Slide 30: Denmark Biomass
200 400 600 800 0 1000 1200 2018/26 2018/27 2018/28 2018/29 2018/30 2018/31 Denmark Biomass 2018/32 2018/33 2018/34 2018/35 2018/36 2018/37 2018/38 2018/39 2018/40 2018/41 2018/42 2018/43 2018/44 2018/45 2018/46 Grow Out I 2018/47 2018/48 2018/49 2018/50 2018/51 2018/52 Grow Out II 2019/01 2019/02 2
Slide 31: Denmark Mortality
Denmark Mortality ▪ Mortality as % of biomass gain: ~3.5% (~2.5% resulted from new construction commissioning) 31 |
Slide 32: Denmark Harvest
Denmark Harvest ▪ ~240 metric tons (rlw) harvested since March 2019, with an average weight of 5.1kg (rlw) Harvest net biomass (tonnes rlw) 60 50 40 30 20 10 0 32 |
Slide 33: Denmark – Ongrowing and Ongrowing 2
Denmark – Ongrowing 1 and Ongrowing 2 Ongrowing 1 department – 100 grams to 1,8 kg New Ongrowing 2 department – 1,8 kg to ~4 kg • 14 tanks (total volume 6,070 m3) • 8 tanks - total volume ~11,100 m3 • Max theoretical standing biomass 450 tons • Max theoretical standing biomas 825 tons Harvest and pr
Slide 34: Denmark Innovation
Denmark Innovation Testing and improving solutions ▪ Overall RAS system testing and optimization ▪ Training of employees and establishing operational protocols ▪ Feed trials for performance and physical quality ▪ Fish movement and logistics 34 |
Slide 35: Denmark - Measurement and Quality Control
Denmark - Measurement and Quality Control ▪ Highly improved water quality measurements implemented ▪ Centralized system for online measurement for improved controll and derisking 35 |
Slide 36: Denmark – Photos
Denmark – Photos Fish in a large 1,700m3 tank Sensoric test at site Bluehouse salmon Test of smoked salmon (at local sushi restautant) Color evaluation of fillets 36 |
Slide 37: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR
Slide 38: US Production Update
US Production Update Mario R. Palma G. Aquaculture Director |
Slide 39: US Operational Goals - 2019
US Operational Goals - 2019 ▪ Safe environment & operations ▪ Commissioning of systems (SAT Tests) ▪ Production plan in line with biological KPIs ▪ Finalize processes, protocols and procedures ▪ Hire full team ▪ Develop training program 39 |
Slide 40: US Production Status
US Production Status Miami biological performance is in line with our budgeted KPIs ▪ Three batches are currently in the water, ~1.67m individuals Batch Actual Number Wg (g) Accumulated Loss Yield (%) System Total Week Age 001A 267,155 3,93 8,33% 91,67% Parr 23 001B 283,457 3,47 13.2% 86.80% Parr 21
Slide 41: US Production Status
US Production Status Batch Actual Number Wg (g) Accumulated Loss Yield (%) System Total Week Age 001A 267,155 3,93 8,33% 91,67% Parr 23 001B 283,457 3,47 13.2% 86.80% Parr 21 002 548,595 0.41 6.15% 93.85% Start Feeding 12 003 567,784 0,18 1.12% 98.88% Hatchery 1 4 1,666,991 ▪ Batch Three: Fully hatc
Slide 42: US Progress
US Progress System Technical acceptance of hatcheries 1 and 2, start feeding, and parr Commissioning Pre-smolt technical acceptance expected ~week 20 Biofilter Start Up Complete new biofilters in parallel with construction Egg Surveillance Three batches received to date, normal hatch process, low mo
Slide 43: US Phase 1 Pending Milestones
US Phase 1 Pending Milestones ▪ Commissioning of 9 RAS systems ▪ Receive a new batch of eggs every 7th week ▪ Achieve budgeted KPIs in production (SGR, FCR, mortality rates) ▪ Improve processes, protocols and procedures ▪ Complete hiring of the team by Q4 2019 ▪ Start harvesting process mid-2020 43
Slide 44: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR
Slide 45: Technology Update
Technology Update Thue Holm, CTO |
Slide 46: Systems Over 500 t/yr in Production
Systems Over 500 t/yr in Production ▪ Company 1 – Planed 2000 t/yr – Salmon – Start year 2014 ▪ Akva Group ▪ Company 2 – Planned 3000 t/yr – Trout – Start year 2016 ▪ Kruger ▪ Company 3 – Planned 600 t/yr – Salmon – Start year 2016 Kalness ▪ Company 4 – Planned 1200 t/yr – Kingfish – Start year 2017
Slide 47: Design - RAS Grow-out Farms
Design - RAS Grow-out Farms Flow through Farm Reuse Technology Goals of various designs ▪ Reduce investment ▪ High growth per m3 Artec Aqua & Salmon Evolution ▪ Ease fish movements Long donut concept ▪ Smaller foot print ▪ Recirculation degree Losna Seafood Nordic Aquafarms Examples Of Conceptual Gr
Slide 48: Design - RAS Grow-out Systems
Design - RAS Grow-out Systems Biofilter optimal investment: System investment € / kg production kg production/year vs biofilter size Tanks per 3000 ton production system 8000.00 20.0 1.95 19.0 7000.00 18.0 1.90 17.0 6000.00 Square meters 16.0 1.85 15.0 5000.00 14.0 Meters 1.80 13.0 4000.00 12.0 1.75
Slide 49: Design - Strategy
Design - Strategy ▪ Give fish ideal conditions ▪ Innovation in the details ▪ Reduce risk ▪ Focus on production flow ▪ Cost efficient building methods ▪ Low maintenance ▪ Proven technologies preferred ▪ Implement Denmark learnings in the US Transfer Of Denmark Experience To The US Is Key – “The Devil
Slide 50: Design - Future Design Considerations
Design - Future Design Considerations US BluehouseTM Reduce investment and production cost per kg: ▪ Standardized systems ▪ Increased automatization of systems Future design input: ▪ Faster growth, e.g. improved genetics Design ▪ Improved feed for RAS ▪ New building techniques – concrete, tanks and
Slide 51: Vertical Integration Opportunities
Vertical Integration Opportunities Packaging Broodstock material Sustainable Secondary power processing BluehouseTM vertical integration opportunities Feed Fertilizer Value-added Oxygen ingredients ▪ Identified opportunities expected to increase efficiency and new revenue streams, while maintaining
Slide 52: IP and R&D
IP and R&D R&D and IP Intellectual Property Patents Clusters 3 U.S. Issued Patent 1 U.S. Filed Application 3 Disclosure 1 Unfiled 19 ________________________ Total 24 Research & Development ▪ Flavor management ▪ Biofilter bacteria ▪ Process optimization IP and R&D Is A Key Strategic Focus In The Dev
Slide 53: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR
Slide 54: US Groundwater Update
US Groundwater Update Eric Meyer, Director of Operations |
Slide 55: US Groundwater
US Groundwater Abundant Groundwater Is The Key To Sustainable Land-Based Salmon Aquaculture 55 |
Slide 56: Florida Rationale
Florida Rationale ▪ Presence of a high-capacity waste water disposal zone - Lower Floridan aquifer; the “boulder zone” ▪ This isolated zone is present at a depth of ~3,000 feet ▪ Injection well testing validated acceptance of 16,400 gpm at 46 psi wellhead pressure. ▪ Artesian aquifers – Upper and Mi
Slide 57: The Boulder Zone
The Boulder Zone ▪ Unique geologic unit of extremely high transmissivity ▪ Commonly used for disposal of municipal and industrial wastewater in South Florida ▪ Sole geologic unit that can safely accept the high flows at low such low injection pressures ▪ Wells constructed to meet "Class I" construct
Slide 58: Utilization of Groundwater Resources
Utilization of Groundwater Resources 58 |
Slide 59: Permitting
Permitting FDEP Injection Well System (Wastewater) ▪ Class V, Group 9 Aquaculture Injection Well – Construction and Operational Testing ▪ Maximum Injection Flow Rate: 13,842 gpm (10 feet/sec inside the final casing) ▪ Permit Renewal Date: December 15, 2021 ▪ Apply for operational permit 18-months fo
Slide 60: Groundwater Contamination Risk Assessment
Groundwater Contamination Risk Assessment Biscayne Aquifer Flowing Artesian Well UF-1 (Brackish) ▪ Cleared by the Florida Dept. of Health for use in the farms ▪ Aquifer is the principal source of freshwater for domestic and agricultural use throughout Miami-Dade Co. ▪ Since this aquifer is unconfine
Slide 61: Future Permitting - Injection Wells
Future Permitting - Injection Wells ▪ Boulder Zone injection wells for municipal and industrial wastewater disposal are common ▪ Prohibition of wastewater disposal through ocean outfalls will add to Class I injection well permitting and construction in the state ▪ The duration for design and permitt
Slide 62: Future Permitting - Groundwater Production Wells
Future Permitting - Groundwater Production Wells ▪ Current SFWMD groundwater use permit is allocated from the Biscayne aquifer and Floridan aquifer ▪ Permit expires in 20 years and can be renewed. ▪ Unregulated lower Floridan Groundwater is not economically viable for domestic use due to its near se
Slide 63: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR
Slide 64: US Construction Update
US Construction Update Arthur Hoynack, Owners Rep. to Atlantic Sapphire |
Slide 65: US Construction Progress Update
US Construction Progress Update In Operation ▪ Hatchery, start-feed and parr areas ▪ Pre-smolt area (~ week 20) To Be Completed: ▪ Oxygen center ▪ Smolt ▪ 2nd floor offices ▪ Saltwater treatment system ▪ Injection, salt water and fresh water wells ▪ Post-smolt ▪ Ongrowing ▪ Processing 1 Productive c
Slide 66: US Design & Construction Management Team Structure
US Design & Construction Management Team Structure Atlantic Sapphire Design Construction Management Water & Civil Aquaculture Engineer Trade Trade Trade Architect Aquaculture Sub Sub Sub Structural Tier 2 Tier 2 Tier 2 Engineer MEP Engineer 66 |
Slide 67: US Construction Progress Update
US Construction Progress Update Considerable learnings have been gained during US Phase 1 design and construction process Insights - design phase ▪ Complete documents -100% design & construction drawings before construction starts ▪ Scope - include all aquaculture and building systems to be construc
Slide 68: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR
Slide 69: Sales & Marketing Update
Sales & Marketing Update Damien Claire President, Platina Seafood USA |
Slide 70: Contents
Contents ▪ Market Overview ▪ Competition ▪ Unique Product Attributes ▪ Target Segments ▪ Customers ▪ Consumers feedback ▪ Marketing Strategy 70 |
Slide 71: US Salmon Market
US Salmon Market US is the single largest market for Atlantic …and the US demand for salmon is …with considerable upside potential salmon… increasing rapidly… Market size Atlantic salmon (kt)1 US Atlantic salmon demand (WFE kt)2 Salmon consumption per capita (kg/year)3 81 % implied increase in 7.9 5
Slide 72: Competing Product Origin and Brands
Competing Product Origin and Brands ▪ There are many brands of salmon in the market ▪ Growing US market attracts all origins ▪ Many price levels, from commodity to premium brands 72 |
Slide 73: Unique Product Attributes
Unique Product Attributes Brand attributes and promises ▪ Delicious taste – mild flavor, delicate texture, very versatile for cooking ▪ Sustainable – lower carbon footprint and FI:FO ratio ▪ Eco-friendly – reduces impact on wild species and the environment ▪ All natural – free of antibiotics, hormon
Slide 74: Target Segments – Unique Opportunities
Target Segments – Unique Opportunities Description Sapphire salmon has won blind tastings with Michelin starred and celebrity chefs. Our name is 1 Restaurants and chefs printed on menus, building strong brand awareness Retailers are recognizing the value of having a 2 Retailers healthy and sustainab
Slide 75: Customers
Customers > AMERICAN FISH ZA ey (os SEAFOOD Inc. —— SEAFOOD INC: ATLANTIC SAPPHIRE
Slide 76: North American Consumers Feedback
North American Consumers Feedback Positive feedback on product quality, brand attributes and taste ”Love there are no Antibiotics” “It has a mild, buttery “Moister than other flavor that won’t Atlantic salmon overpower anything you when cooked” pair with it” “Gateway fish for spouse and children who
Slide 77: Marketing Strategy
Marketing Strategy Ongoing strategy ▪ Strong sales relationships in North America ▪ In-store education ▪ Partnerships with NGOs Future developments ▪ “Fractional Marketing Director” engaged – new marketing strategy ▪ Develop marketing plan to support strong price premium ▪ Assist sales with educatio
Slide 78: ATLANTIC GO SAPPHIR
ATLANTIC GO SAPPHIR